Hanoi (VNA) – Experts and policymakers gathered at a forum held by the Central Institute for EconomicManagement (CIEM) in Hanoi on October 24, discussing policy solutions for2018-2020 to boost growth model reform in Vietnam.

The forum took place as part of themacroeconomic reforms/green growth programme in Vietnam funded by the GermanGovernment via the German agency for international cooperation GIZ.

CIEM Director Nguyen Dinh Cung said it isnecessary to immediately remove obstacles to accelerate the disbursement ofstate investment capital right from the beginning of 2018 to avoid a recurrenceof the sluggishness in the last two years. He also urged better use of State-ownedand private enterprises’ capital.

“The efficiency of foreign invested firms inVietnam is very high, even three times higher than State-owned and privatefirms in terms of the return on invested capital. Therefore, it is crucial toimprove domestic businesses’ competitiveness,” he analysed.

He suggested creating “pressure” for the eliminationof at least one-third or half of the business conditions, and at least half ofthe number of goods subject to specialised export-import examination whilereforming management methodology.

Another factor expected to promote Vietnamesegoods’ competitiveness on domestic and foreign markets is slashing logisticscosts, which will help improve the country’s export value chains, Cung noted,adding that relevant agencies also need to instruct and assist businesses tocomply with regulations instead of fining them.

Nguyen Tham, former Vice Chairman of the VietnamLogistics Business Association, said without positive changes and strongersolutions, the burden of unofficial expenses and logistics costs will greatlyaffect goods’ cost price. This will directly impact the country’s goods valuechains and Vietnamese commodities’ competitiveness both at home and abroad.

Meanwhile, Dr Pham The Anh from the National EconomicsUniversity said the exchange rate policy should be flexible to enhanceVietnamese goods’ competitiveness.

He elaborated that the State Bank of Vietnambegan setting the daily reference VND/USD exchange rate in 2016 based on acurrency basket of the country’s biggest economic partners, but this mechanismis not enough to support foreign trade activities. Vietnam’s exchange ratepolicy is still in a dilemma as it has to ensure inflation control along withpublic debt stability and trade promotion.

A floating exchange rate mechanism undermanagement will bring about more benefits than the current fixed one. However,this mechanism still needs certain conditions to be applied and proveeffective, Anh added.

Only when bottlenecks are removed and new growthmomentum is created can sustainable development be promoted, according toparticipants in the forum.-VNA